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Progress Energy Earnings Lose Ground

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By RUSSELL RAY The Tampa Tribune

Published: May 9, 2008

TAMPA - Florida's sluggish real estate market contributed to a 24 percent drop in first-quarter earnings at Progress Energy, the company reported Thursday.

Net income for the Raleigh, N.C.-based energy company fell from $275 million, or $1.08 a share, in the first quarter of 2007 to $209 million, or 81 cents a share, in the first quarter of 2008.

Executives attributed the downturn to lower electricity sales caused by milder weather in the Southeast and lower-than-expected customer growth in Florida, where the company operates St. Petersburg-based Progress Energy Florida.

Overall, Progress Energy provides electricity to 3.1 million customers in the Carolinas and Florida, including Pasco, Pinellas and a portion of Hillsborough County.

Paul Franzen, energy industry analyst for Edward Jones, said the company's decrease in earnings is "not a reason for long-term investors to get out of the stock." That's because earnings from the company's ongoing operations are still healthy, Franzen said.

First-quarter ongoing earnings were $148 million, or 57 cents per share, compared with $149 million, or 59 cents per share, for the same three months last year.

The bulk of the decline is tied to the company's discontinued operations, Franzen said, or assets the company recently sold to reduce debt, including the $94 million completion of a deal to sell coal mines and river terminals associated with its synthetic fuels business.

"They've lowered the overall risk profile of the company," he said. "And by paying down debt, they've also improved the financial strength of the company."

Reporter Russell Ray can be reached at (813) 259-7870 or rray@tampatrib.com.

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